Workplace pension contribution calculator (UK)
Auto-enrolment contributions are charged on a slice of pay, not all of it - which is why the number is always lower than people expect. This works out the slice, the split, the worker's enrolment category, and what salary sacrifice changes.
The worker
Qualifying earnings band £6,240 to £50,270; auto-enrolment trigger £10,000; minimum 8% total of which 3% employer (gov.uk). An estimate for a single worker on steady pay - real payroll works period by period, so a variable-hours worker is assessed each pay run.
The minimum is 8% of qualifying earnings, with the employer paying at least 3% - but "qualifying earnings" means only the pay between £6,240 and £50,270 (gov.uk). Someone on £30,000 therefore has £23,760 of qualifying earnings, and the 8% is charged on that. Auto-enrolment itself is triggered at £10,000 a year for workers aged 22 to State Pension age.
The three categories of worker
Auto-enrolment is often described as one duty. It is really three, and the difference decides whether you must enrol someone, must contribute for them, or neither.
| Category | Who | Your duty |
|---|---|---|
| Eligible jobholder | Aged 22 to State Pension age, earning over £10,000 | Enrol automatically; contribute |
| Non-eligible jobholder | Aged 16-21 or State Pension age to 74 earning over £10,000; or aged 22 to SPA earning £6,240-£10,000 | Do not enrol, but they may opt in - and then you must contribute |
| Entitled worker | Earning £6,240 or less | They may join; you do not have to contribute |
The categories are assessed every pay period, not once at hire. A part-timer who picks up overtime can cross £10,000 for a single month and become an eligible jobholder in it, which is the most common source of a missed enrolment.
Qualifying earnings, or something better
The default basis is deliberately narrow. Because the band starts at £6,240, an 8% contribution on a £20,000 salary is 8% of £13,760 - about 5.5% of what the employee actually earns. Section 28 of the Pensions Act 2008 lets an employer certify an alternative basis instead - typically total pay or basic pay - at percentages set in regulations, which must be at least as generous overall as the default. Switch the basis in the calculator above to see what a wider definition does to the same percentage.
The exact certified sets change, so check the current ones with The Pensions Regulator before you certify. The principle does not change: a wider earnings definition is the cheapest way to make a pension materially better without touching the headline percentage, and it removes the awkward conversation about why 8% is not 8%.
What salary sacrifice actually changes
Under salary sacrifice the employee gives up gross pay and the employer pays the whole contribution instead. The pot is the same size; what changes is National Insurance. Pension contributions are one of the few benefits still exempt from the optional remuneration rules (gov.uk), so the sacrificed pay escapes NI on both sides: 15% for the employer, 8% for the employee - or 2% where that pay sits above £50,270.
Three things to watch before offering it:
- It cannot take cash pay below the national minimum wage. That is a hard floor, and it is why sacrifice schemes usually exclude the lowest-paid.
- It reduces the pay figure used for mortgages, statutory maternity pay, and redundancy pay unless you define a notional salary for those purposes - most employers do.
- It is a contractual change, so it needs the employee's agreement in writing, not a payroll flag.
The duties that are not about money
- Assess every pay period and enrol anyone who becomes eligible, within six weeks of the assessment date.
- Write to each worker explaining what has happened and their right to opt out - within six weeks of their duties date.
- Honour the opt-out window. Staff have one month from joining to leave without penalty, and you must refund their contributions within one month of the request. Never encourage anyone to use it.
- Re-enrol every three years - three years after your first member of staff started, and every three years after that - writing to eligible staff within six weeks, then filing a re-declaration of compliance even if nobody was re-enrolled.
- Keep the records for six years: names, addresses, ages, earnings, contribution dates and the scheme reference. Requests to leave the scheme are kept for four years.
The benefits policy template covers how to describe all of this to staff, and the auto-enrolment guide goes through the duties in order.
This calculator applies the statutory rules as published and shows its working, but it cannot know your contracts, your policies or anything unusual about the case. Treat the figure as a starting point, and take advice on anything contested or expensive.
Benefits your team can actually see
CoDash shows each person what they get and what it is worth - pension, leave, and everything else - so the package you pay for is the package they know about.